As in many other categories, luxury leather goods faced the double challenge of store closures and a lack of tourists. Despite its greater resilience in the review period (with category retaining strong growth even in the years of the Yellow Vest protests and terrorist attacks), luxury leather goods did not prove immune to the effects of the COVID-19 crisis and registered a striking decline in 2020.
Air travel and airlines suffered greatly from the COVID-19 pandemic as countries around the world put travel bans and restrictions in place to prevent the spread of the virus. As such, from March to May 2020, there were almost no flights available, and when French national lockdown restrictions were eased, flights were then limited, offering very few medium or long-haul destinations.
In the first half of 2020, many of the most prestigious brands in luxury leather goods such as Louis Vuitton, Gucci and Hermès recorded a double-digits decline in sales. These players and many others closed their production sites in March 2020, as the national lockdown began, until they initiated a progressive reopening in May 2020.
Even if handbags will remain a key accessory “that makes the difference” to an outfit, it is anticipated that there will be a trend towards more utilitarian bags and luggage, at least in the short term. Whilst luxury luggage is expected to see a greater recover in 2022 (in line with the rebound of medium- and long-haul flights, package holidays, and city breaks, backpacks and specific bags for cyclists are expected to forge the greatest growth.
Historically, luxury leather goods retailers have relied on affluent Chinese tourists for a significant proportion of sales, with many of these customers visiting Paris to shop as a key part of their Europe experience. Whilst inbound tourism is expected to increase in 2023 and with it increase luxury leather goods sales, it is likely that players in the category will no longer be able to remain so dependent on inbound Chinese and Asian consumers.
The steady rise of second-hand sales is expected to hamper the retail value growth of luxury leather goods in the forecast period, as multiple web platforms, such as Vinted and Vestiaire Collective, promote used items and are gaining popularity. Luxury brands of bags and luggage are particularly popular via these channels.
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Luxury Leather Goods
This is the aggregation of luxury bags and small leather goods and luxury travel goods.See All of Our Definitions
This report originates from Passport, our Luxury Leather Goods research and analysis database.
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